Do Immigrants Affect Firm-Specific Wages?

Malchow-Møller, Nikolaj, Jakob Roland Munch and Jan Rose Skaksen
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Malchow-Møller, Nikolaj: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark
Jan Rose Skaksen: Department of Economics, Copenhagen Business School, Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark

No 07-2008, Working Papers from Copenhagen Business School, Department of Economics

Abstract: In this paper, we propose and test a novel effect of immigration on the wages of native workers. Existing studies have focused on the wage effects that result from changes in the aggregate labour supply in a competitive labour market. We argue that if labour markets are not fully competitive, the use of immigrants may also affect wage formation at the most disaggregate level – the workplace. Using linked employeremployee data, we find that an increased use of workers from less developed countries has a significantly negative effect on the wages of native workers at the workplace – also when controlling for potential endogeneity of the immigrant share using both fixed effects and IV. Additional evidence suggests that this effect works at least partly through a general effect on the wage norm in the firm of hiring employees with poor outside options (the immigrants).

Keywords: na (search for similar items in EconPapers)
JEL-codes: D21 H32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-lab and nep-mig
Date: 2009-01-01

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Related works:
Working Paper: Do Immigrants Affect Firm-Specific Wages? (2007)
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